Be Different or be dead

March 19, 2021

Why a marketing strategy to bundle is absolutely the wrong thing to do

Source: Pexels

Why a marketing strategy to bundle is absolutely the wrong thing to do.

A marketing strategy to bundle is a catastrophe; it’s nothing more than price cutting in disguise.

’Customerization’ replaces the traditional marketing approach of developing products and services for the masses in favor of creating packages of value for the chosen few customers you have selected to serve.

Many marketers equate packaging to bundling, and yet they are completely different concepts.

A bundle:

▪️ the whole = the sum of its parts. It is a collection of products and services kluged together without forethought of an integrated value proposition.
▪️ is driven by a price theme of savings.
▪️ price is a discount over what you would pay for all of the components if purchased individually. They follow ‘the more you buy the less you pay for each element’ theme.
▪️ is branded using the word ‘bundle’ to describe the pasting together of individual products or services - eg “The Financial Services Bundle”.
▪️ forces the potential customer to define value they would likely receive. Rarely is the value proposition offered anything else but cheap prices.
▪️ is easy to copy by competitors within an industry (everyone offers bundles these days) since it is really a lower price in disguise.
▪️ consumes relatively few marketing resources. The price message over a collage of existing products and services doesn’t require a significant investment to go-to-market.
▪️ is smoke-and-mirrors innovation. It gives the illusion (to the marketers) that the process is innovative when it clearly it’s nothing more than an assemble-and-discount one.

It’s a price play, pure and simple.

A value package:

▪️ the whole is greater than the sum of its parts. Package components are combined together to generate more value that they would by pasting them together.
▪️ is driven by a value theme and the great ones are built around the idea of creating new experiences for people.
▪️ the price is a premium to the sum of the individual product and service components. Value packages are priced on the basis of the overall value created and not on the price points of the components.
▪️ is branded as something NEW, and reflects the set of benefits created for the customer.
▪️ makes the value explicit for the customer. The value proposition is expressed in terms of value received from the collection of components operating synergistically.
▪️ is tough to copy by the competition since the package is the result of a value integration process.
▪️ consumes more marketing resources associated with integrating value components, branding, strategic partnerships (for package components that must be ‘imported’ from another supplier).
▪️ it exemplifies true innovation by discovering an unmet need and creating a new offering with a unique set of value.

Unforgettable marketing is NOT a price game.

A marketing strategy to bundle your products doesn’t work in the long term. It’s a value play.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 3.19.21 at 10:36 am by Roy Osing
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March 1, 2021

Has the marketing profession really improved over the past 10 years?

Source: Pexels

Has the marketing profession really improved over the past 10 years?

I wrote this piece originally on Oct 28, 2010 under the title of ‘Marketing is an absolutely boring bust’.

And the reality is that in 10 years, some things have definitely changed in terms of how marketing is practiced but equally, there are many things that remain unchanged that I expected and hoped would change.

Marketing has been victimized by momentum thinking, comfortable with traditional marketing practices and satisfied with applying new digital tools to old thinking.

This is my current view of marketing.

#1. New product and service development

Marketing continues to provide what technology offers; the cool things technology can do via the features inherent in its platform.

There continues to be little new product innovation and invention driven by what people want and crave; the focus remains on trying to match customer needs with current products and services available in the marketer’s kitbag.

People do not buy goods and services . They buy relations, stories and magic. — Seth Godin

New product marketing — discovering people’s secrets, creating value packages and personal offers — hasn’t arrived to any significant degree yet; marketing existing products occupies 90% of what marketers today do.

The answer to the question “Where is the customer in all this?” remains a mystery. They should be the main input to the marketing process but they’re not.

AI tools are touted as the ‘magic’ solutions to improve the customer web experience.

Typical AI applications include:
— consumer behavior forecasting.
— product recommendations to individuals based on previous browsing or purchase behaviour.
— personalized advertising.
— marketing messaging.
— customer service via telephone or chatbot.

In addition to applications that involve behavioural algorithms such as these, it is important that AI technology development be channeled to provide input to the new product development process.
Gathering behaviour information on individual’s questions and purchases should be used to gain insights that feed product innovation and to create new personal holistic packaged offers for each of them.

#2. Flogging products and services

The infatuation with pushing products at people continues to dominate mainstream marketing even though new web personalization tools are now available, all claiming to make web experiences more personal and relevant for visitors to entice them to buy.

This is, however, a disguised attempt to present the flogging agenda in a more acceptable light.

ME marketing has progressed very little as marketers are content to continue flogging existing products and worrying about conversion rates.

These new digital tools — which leverage previous browsing and purchase behaviour — are intended to increase the productivity of flogging products.

Further, tracking an individual’s browsing habits and feeding products back to them in subsequent browsing sessions (or sending them email offers) under the guise of personalization is misleading because it assumes I’m interested in what I’ve clicked on or previously bought, ergo it’s contributing to a more personal experience.

Curiosity shouldn’t be confused with interest.

Pushing products on me based on my behaviour yesterday may produce some positive results but I find it intrusive and annoying. When my screen is literally pasted with ads based on what I’ve clicked on in the past and my rudimentary demographics, it’s anything but a pleasant experience; in most cases the experience is frustratingly irrelevant and takes away from the advertiser’s brand currency.

Under the guise of creating personal experiences for people, marketing has chosen the path of using technology to do a more efficient job at flogging products at them.
And now, a person’s screen is barraged with numerous suppliers all trying to do the same thing. How can this enhance one’s overall experience? It can’t.

#3. Price

Price continues to be the prime element of the marketing marketing and selling proposition; it dominates the marketer’s reasoning as to what motivates someone to buy.
And the irony is that this price focus adds very little — if anything — to the strategic positioning of the organization; price is easily copied by the competition and therefore no competitive advantage is achieved.

The reason it seems that price is all your customers care about is that you haven’t given them anything else to care about. — Seth Godin, marketing genius

And so you see a myriad of special pricing and promotion deals with giveaway incentives to attract new customers (and increasing acquisition costs in the process), discounted product and service bundles, and points-based loyalty programs on the marketing agenda.

Marketing has a long way to go to pivot from price to value; to market distinctive and unique value created by their products and services rather than the prices paid.

#4. Differentiation

Market players continue to look alike for the most part with little differentiation among them even though the intensity of competition continues to grow.

The irony is overwhelming. This is exactly the opposite to what you would expect. When competition increases, you would expect the players to get more competent in terms of differentiating themselves from others. But this has not happened. In fact the opposite is true; competitive differences are declining and sameness is proliferating.

The same old platitudes and competitive claims that pervaded the media a decade or more ago continue to live on:
- We provide the best network.
- We have the best people.
- We exceed customer expectations.
- We create memorable experiences.
- Our goal is to delight you.”

In a crowded marketplace, fitting in is a failure. In a busy marketplace, not standing out is the same as being invisible. — Seth Godin

Marketers today seem to be willing to let the innovators of the digital toolset do their thing, but they are unwilling (or incapable) of defining a new relevant marketing context (based on striving for uniqueness and remarkability) to make these tools relevant.

Relevance today should be based on carving out an edge that is pure and unique, not vague and bland.

Where the hell is marketing leadership?

#5. Benchmarking

Google “Why is benchmarking so important” and this is some of what you get:

Benchmarking helps organizations overcome complacency. They continuously strive to improve their performance standards in order to stay relevant in the market. ... Benchmarking helps organizations to identify the areas where the gap between their standard and that of the industry is the largest.

Ok, so the objective is to improve, to get better, to incrementally move forward and to get closer to the ‘best’; striving to copy them.

Hmmm… I’m not sure that being the same as someone else is the marketer’s end game.

Surely you want to be unique and remarkable with the ability to capture their imagination and forever gratitude. Right? Of course, because it’s the only way to guarantee a sustainable position in the marketplace and stay healthy.

Benchmarking is the antithesis to achieving a long term strategic advantage, and unfortunately it’s still alive and well. I’m witnessing more of it than 10 years ago.
Organizations tag best in class copying as innovation more today which implies that the rate of true marketing innovation is on the decline.

There has been literally no progress in using benchmarking as a baseline tool to create distinction and separation from the competitive herd.be different from.
Truly disappointing that marketing is still stuck in the benchmarking rut.

#6. ‘Creeping incrementalism’

The priority for marketers continues to figure out how to incrementally improve, rather than take bold action to be different and stand out from other players.

Increment rather than invent; change rather than create continue to be the marketer’s priorities.

WOW! power to separate market participants still takes a back seat to product augmentation based on what others do and what new technological capabilities are currently available.
With every marketing organization doing this, it’s little wonder that no single organization stands out.

A main component of the incremental marketing mindset remains the need to ‘round-the-corners’ on products that are introduced; small compromises made by the marketer to try and make a product appeal to a wider audience.

Unfortunately, taking the edge off a product in an effort to try and satisfy more people reduces any uniqueness it may have had and increases its blandness.

Marketing priorities for the next decade

Yes, marketing has definitely made some improvements in the past decade but there are specific areas that marketers need to keep working on as we look forward to 2031.

▪️ Set the objective of being different as the context for all marketing activity. If it’s not different then don’t do it.

▪️Stop bundling and start packaging.

▪️ Create the ONLY statement as the way to express your distinctiveness in the marketplace and define your competitive advantage.

▪️Focus on keeping current customers not on acquiring new ones.

▪️ Refocus AI to help identify insights in people and organizations; use the intelligence gained to create personalized packaged solutions.

▪️ Shape web personalization tools to do more than just increasing the effectiveness of pushing products. Use them to perform functions the individual has demonstrated they want.

▪️ Add customer learning as a critical marketing value and core competency.

(Hopefully) see you back here in 2031 for another report.

Cheers,
Roy
Check out my BE DiFFERENT or be dead book series

• Posted 3.1.21 at 06:59 am by Roy Osing
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February 26, 2021

Why ‘bait marketing’ is a crazy way to attract new customers

Source: Unsplash

Why ‘bait marketing’ is a crazy way to attract new customers.

Bait marketing is crazy; it’s intellectually dishonest; it makes no sense.

I think one of the travesties of today’s marketing is the special promotion designed to bait or attract new customers. I believe it’s a dishonest marketing tactic which works against customer loyalty.

Most companies use special offers or promotions to bait or attract new customers with the belief they will kick sales up a notch and increase revenue.

For the most part, special deals use price as the hook and are time based to encourage people to make a fast purchase decision.

“For the next three months subscribe to our wireless service and get a free LED TV” is a common promotion offered by many as a way to acquire new wireless customers.

These offers are dangled in the face of a potential NEW customer; THEY receive the free TV.

On the other hand, someone who has been a loyal wireless customer for 10 years gets NADA even though they have supported the company to the tune of thousands of dollars.

This is crazy.

There are two main issues I have with this bait marketing approach.

Lazy marketing

First, it’s lazy marketing. The easiest thing to do is to give stuff away with the mistaken belief that if you do, the recipient of the gift will somehow feel obligated to enter your loyalty tent and remain dutiful henceforth.

Not true.

Despite the studies marketers trot out, people value what they pay for, and if they pay nothing to move from another supplier to you they laugh under their breath and wait for the next juvenile marketer who comes along and makes you a better offer. And when they find one, bye-bye.

Intellectual dishonesty

Second, bait marketing is not only an insult to the loyal customers who have given themselves to your organization for years, it’s also intellectually dishonest.

Existing customers rarely qualify for the bait deal. The free TV is NEVER offered to the customer who has been loyal for 5 or 10 years!

They have steadfastly paid their bill on time every month. They have put up with the odd price increase and policy change but their loyalty has been resolute.

And they have rarely been offered a deal on anything. They may have been thanked for their loyalty with words or an annual free calendar, but certainly nothing as substantial as the person being baited.

And when they discover that a special promotion is being offered to new customers and ask for the same deal they are told “I’m sorry you don’t qualify for this promotion”.

How do they feel? Second rate? Third rate? Don’t rate?

Special offers should be placed at the feet of your loyal customers fIrst. Reward or retention marketing may not be as sexy as its bait cousin, but special deals should be extended to existing customers FIRST!

It’s an awesome way to thank people for their ongoing support and return the favour with a token of your appreciation. Think about it as re-investing (in them) some of the revenue they have generously given you over the years.

But companies rarely use promotions this way.

They’re afraid of losing money

They actually believe that if they offer the new customer deal to an existing loyal customer they will lose money; they don’t want to take the revenue hit from current customers taking advantage of the savings.
They don’t feel it is necessary to offer the promotion it to loyal customers to encourage them to stay. And if an exiting customer takes the deal they don’t believe it stimulates new sales.

These are bogus arguments for a number of reasons:

▪️Offering something special to your loyal fans will surprise and delight them.
They will stay loyal to you as long as you serve them well. And they will act as your best advertisers by telling the story to others about how great you are. Revenue will grow as a result.
Ever done a Net Present Value calculation on a customer who has been with you for 10 years? Is it a big number or small number. Right!

▪️If you don’t include them they will find out.
They will know that they are not included in the deal and they will be angry and feel neglected. They might leave you, but for sure they will talk you up to their friends and family as a selfish organization that does not care about their loyal customers. They will slander your brand; shouting out your lack of integrity and honesty.

▪️If your special deal attracts someone because of their thirst for your low price, what makes you think they won’t leave you for a better offer? A special targeted at ‘switchers’ is also fuel for more switching. Then you have realized zero return on your promotion investment and you have given your current customers reason to leave.

▪️Investing in your loyal customer base always makes sense.
You’re not reducing your margins by offering them the special deal, you’re reinvesting some of your margins in them to maintain their loyalty. Why do companies buy back their own shares?

Read the fine print. This offer is for ‘new subscribers only’!

It’s time organizations re-think the strategy behind ‘the special deal’ which is unethical and dishonest.

Any way you cut it, the deal strategy for new customer acquisition is risky.

Baiting people to become new customers for you is crazy.

Show customers why they should stay with you; invest your resources accordingly.

Cheers,
Roy
Check out my BE DiFFERENT or be dead book series

• Posted 2.26.21 at 10:37 am by Roy Osing
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February 11, 2021

Why is a craving more important than a need to marketer’s?

Source: Pexels

Why is a craving more important than a need to marketer’s?

‘Crave research’ is the new black in the discipline of determining the triggers that make people buy.

But there still seems to be focus given to traditional marketing research which relies on determining what people need even though most people already have their needs satisfied.

Which means if you remain needs focused you will eventually end up competing on price as the other attributes of your product are the same as other providers - if 2 products are essentially the same in terms of features, price is the only thing left to try to distinguish one from the other.

But competing on price is an ugly place to be. Customers love low prices; organizations not so much, as profit margins are squeezed and competitors can easily copy.

Marketing needs to turn from needs-centric research to ‘crave’ research

The questions to ask in crave research are different than those asked in traditional market research: what do you crave, covet, ache (for), hunger (for), itch (for), sigh (for), yearn (for), lust (after) and long (for) replace ‘what do you need?’

The crave questions address what people spend their discretionary money on these days at premium prices — the marketer’s sweet spot.

The crave game is the new game that will separate successful companies from the mediocre and dying ones.

Crave-based offerings are automatically personalized because no two people crave exactly the same thing. And they command higher margins as people are generally prepared to pay more for an item they are emotionally pulled towards as opposed to one that fills a staple need in their lives. We get upset when car insurance rates go up 15% but don’t sweat the fact that we just financed a high end SAV for $100,000.

In a crave market, the basis for competition suddenly changes; price is no longer the most important element; the strength of the crave pull is.

Competitive advantage in crave markets goes to the organization that best delivers personalized crave-based offers.

A nice place to be — high market share at premium prices that deliver high margins. Nirvana marketing.

Long term sustainable competitive advantage is possible because once the crave research and offer development infrastructure has been developed, it can be sustained as crave factors change.

And the crave marketer is automatically changing with the customer; they are always relevant to the markets they serve.

Do you study what your customers crave?

Observe and ask them.

Build your marketing machine around what you discover.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 2.11.21 at 05:38 am by Roy Osing
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